How Ecommerce Bazaars Are Supporting Traditional Businesses

Macy’s, Walmart, Best Buy: all brick-and-mortar giants looking to go multichannel. But what about the smaller shop owners that don’t have the resources to invest in and maintain digital presences?

Many young ecommerce providers are aggregating small businesses into a single, online bazaar. If you’re an independent retailer, these service providers can give you the infrastructure and know-how to establish yourself online. Of course, they’ll also need to integrate deeply with your company’s infrastructure.

Shoptiques, for instance, hosts an online fashion marketplace with thousands of boutiques. But founder and CEO Olga Vidisheva sees the company as more akin to tech services like ZocDocs and OpenTable than a more intuitive competitor like Farfetch, another online market of fashion boutiques.

“The goal is for us to be incredibly integrated through the technology. … Even operationally, we want to go so far as to integrate with the point of sale in a physical store,” Vidisheva told AdExchanger.

BloomNation, an online collection of independent local florists, is looking to apply the same strategy in an attempt to upend the wire services, FTD, 1-800-Flowers and Teleflora, that have dominated the market for generations.

“We want to take over as much of the responsibility and technology that we can for them,” said BloomNation founder David Daneshgar. “Everything besides what they actually do, which is being a florist.”

BloomNation, through its cloud-based service, can take on issues of web development, IT, graphic design, online payment services, local advertising, A/B testing and data analytics.

It also expands the florist’s brand. When a florist sells through a delivery service like FTD, the product is branded as an FTD bouquet.

Shoptiques similarly leverages the data it pulls from its members, including incorporating email lists, which gives the company massive email marketing reach without marketing outlay. It can tell retailers which product lines were most successful and enable quick adjustments to marketing strategies, as well as targeting local customers via its mobile app.

Thumbtack, a platform that connects users with service provides and aims to take over their technology operations, also taps an industrywide data supply to benefit the businesses that use it.

“Being a good plumber or caterer is a completely orthogonal skill to being a good digital marketer,” Thumbtack founder and CEO Marco Zappacosta said. “So our mission is to take away those burdens from a service provider. [Small businesses are] looking for insight into how to run their business better.”

Zappacosta said his company helps them refine prices and products, besides offering a supply of actual customer bids as opposed to leads or clicks.

Shoptiques, like many others in retail, faces barriers to gathering in-store data. It doesn’t have reliable access to sources like loyalty cards, point-of-sale systems or beacon networks, and purchases third-party retail data instead of plumbing its clients’ wells.

While Shoptiques will use an amalgamation of email lists for blasting out its own marketing, that information is siloed, so individual boutiques aren’t getting a peek into competitors’ data.

There are limitations to what these marketplaces can do with the data that’s available to them, and how it’s used or distributed in the community. BloomNation said part of the problem is scale and building out internal capabilities.

“Leveraging that scale and developing a kind of data science team around it … that’s what’s really exciting,” said Daneshgar. “We’re not there yet, but that’s the end game.”

Thumbtack views itself as more of a data conduit for the service providers on its platform. For paying users (someone can sign up for free, but pays for “customer intros”), there is a steady stream of potential names and contact info on target audiences in a small business’s region.

A sole proprietorship with a narrow, local focus may not require the kind of guidance that digitally savvy marketers are accustomed to.

“We have clients who we’re refining their Google advertising, and they’re based out of Beverly Hills and are bidding on searches for ‘Beverly Hills’ without any higher specificity,” said Daneshgar.

Thumbtack similarly highlighted that some vendors are hardly looking for attribution-quality insights. They just want local lead generation without having to learn a Google product suite.

The focus for many successful ecommerce startups is on enabling a business to go back to honing the skill where it actually claims to be an expert, whether that’s floristry, identifying fashion merchandise or SAT prep, and then taking a slice of the revenue they contribute.